World facing new war, Blair admits

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British Prime Minister Tony Blair had conceded for the first time that the world faces a "new conflict" in Iraq where rising bloodshed and kidnappings have made it the "crucible" of the fight against global terrorism.

Blair's dramatic characterisation grabbed British headlines today, just hours ahead of a deadline set by insurgents who have threatened to execute a kidnapped Briton and two Americans - three of dozens of hostages being held by militant groups.

"In this new Iraqi conflict, whatever the disagreements over the removal of Saddam, there is only one side for sensible and decent people to be on," Blair said after talks in London with Iraq's interim Prime Minister Iyad Allawi who vowed to push on with elections in January.

Blair said international squabbling that surrounded the invasion of Iraq in 2003 must not be repeated.

"In this conflict now taking place in Iraq, this is the crucible in which the future of this global terrorism will be determined," he said.

Both Blair and Allawi maintained strong public support for US President George W Bush, saying the Iraq fight must be won so democracy can be born.

However, doubts about the conflict's progress dog the president at home. Top Republican and Democratic senators have challenged the White House's optimistic spin.

Although about 300 people have died in fighting during the past week in Iraq, Bush has downplayed the bloody chaos as "ongoing acts of violence" amid progress that will culminate in the January elections.

The Washington Post yesterday described Bush's take as "bland to the point of dishonesty ... deeply irresponsible and potentially dangerous".

"There's a fundamental disconnect between this rosy picture that is being painted and the reality of what's happening on the ground," Democrat Senator Joe Biden said.

Americans Jack Hensley and Eugene "Jack" Armstrong and British engineer Kenneth Bigley were abducted by gunmen from their Baghdad home last Thursday.

The Tawhid and Jihad group, loyal to Iraq's most wanted man Jordanian Abu Musab al-Zarqawi, have released video of the three, tied up and blindfolded. It has threatened to kill them unless coalition forces release women prisoners in Iraq.

Washington has identified Zarqawi as its top target in Iraq, putting a $US25 million ($A35 million) bounty on his head.

The US military has said there are no large numbers of women being held in custody. It's only two female detainees are both high-security detainees believed to have been instrumental in Saddam Hussein's weapons programs.

Tawhid and Jihad have claimed responsibility for many bloody attacks against the coalition. In May, it released video footage of the beheading of US civilian hostage Nicholas Berg.

Hensley, Armstrong and Bigley are among more than a score of hostages held by a list of insurgent groups.

A graphic videotape posted on a website in the past few days has shown masked gunmen beheading three hostages believed to be Iraqi Kurds accused by militants of cooperating with US forces.

Another group threatened to kill 10 workers from a US-Turkish firm if their company failed to leave the country within three days.